Charles accused of 'cronyism' over Camilla's sister

Prince Charles is under fire over a business deal between his Duchy of Cornwall estate and his sister-in-law.

A Labour MP accused him of "cronyism" after it emerged that Annabel Elliot, sister of his wife Camilla, was employed as an interior designer for three of the Duchy's holiday homes.

But royal aides insisted that Mrs Elliot is a respected interior designer who was awarded the contract on merit. And there is no suggestion that Prince Charles, the Duchy, or Mrs Elliot have done anything wrong.

However, Labour MPs seized on the revelations ahead of tomorrow's report on the Duchy by the Commons public accounts committee - which is expected to demand that the Duchy throws its books open to Whitehall's spending watchdog, the National Audit Office.

Labour MPs have claimed the estate is run like a "personal fiefdom". Their comments have angered Chancellor Gordon Brown, whose aides have condemned "underhand" attacks by MPs on Charles.

But Glasgow Pollock MP Ian Davidson, a member of the committee, said the cottage renovations are evidence that the activities of the Duchy are not being properly scrutinised.

"The first issue is the question of cronyism," he added. "The award of contracts to your own relatives would not be acceptable in any local authority in the country.

"We ought to expect higher, rather than lower, standards from Prince Charles. I appreciate that he is a beneficiary of family blood links, but this shouldn't necessarily extend to his new wife's sister.

"It's not just a lucrative contract - being able to say, 'I do work for the Duchy of Cornwall' gives you a certain social cachet."

'Amazing' deal

Senior Labour backbencher Dr Ian Gibson said the deal was "amazing". He added: "The royals continue to astonish with their financial dealings. The time has come for a proper inquiry into the royal finances."

The cottages are the Guard House and the Little House in the Scilly Islands and Restormel Cottage in Cornwall. Built in the 17th century, the Guard House on St Mary's sleeps four and boasts a garden terrace with panoramic views of the harbour. It has been styled with cool, whitewashed walls and ceilings and country-style furnishings.

The restoration has proved so popular that it is booked until mid-September. In peak season, it costs around £1,500 a week.

The Little House, on the island of Bryher, is being finished and is not yet available for rent.

Restormel Cottage, near Lostwithiel, is 200 years old. It has slate floors, timber-panelled rooms and open fires - logs supplied free by the Duchy - along with a state-of-the-art flat screen television, DVD player and hi-fi. It is also booked solid until the autumn.

But some Scillies residents are furious that the Duchy has moved into the holiday letting business there. Mike Brown, chairman of the Duchy Tenants' Association in the Scillies, said he is "appalled" by the Guard House transformation.

"There is an acute shortage of housing in the islands," he added. "It takes two-and-a-half years even to get on to a waiting list for accommodation. In the past, the Guard House has been used by local teachers. It shouldn't even have been considered as a holiday let."

'Not in the real world'

He said the choice of Camilla's sister as interior designer shows Charles is "not in the real world". Mr Brown added: "I don't know how many interior designers we have got on the islands, but there are certainly local builders."

MP Mr Davidson said: "This demonstrates that the prince appears much more willing to maximise his own income than look after the interests of people on his estates.

"Given that the income will come to him, clearly he has a vested interest. Prince Charles chairs the council which decides the balance between letting to locals and letting for holiday homes. There's obviously a conflict of interest, which should be examined."

Liberal Democrat MP Andrew George, who represents St Ives and the Isles of Scilly, said: "The Duchy has to pursue private sector disciplines. But it has a responsibility for the local communities where it holds estates.

"When it lets properties into holiday lettings, or - even worse - the second home market, for locals living in caravans it's a bit like a red rag. Politically, I think the Duchy needs to be very sensitive."

A Clarence House spokesman said: "Mrs Elliot was selected due to the quality of her work and absolutely nothing else. She has done an amazing job and the sheer volume of bookings we have had speaks for itself."

The spokesman said the contract was not put out to tender because it was paid out of the Charles's private income.

"The cost is being met by the prince out of revenue surplus which is his private income. The capital of the estate has not been drawn on in any way."

She declined to say how much Mrs Elliot was being paid.

Asked how the prince's staff would have been aware of Mrs Elliot's work if not for her relationship with Camilla, she said: "The Duchy is required on occasions to use interior designers to help with the decoration of properties. There are people here who know about these things. Mrs Elliot has an excellent reputation."